Google
is widely
considered to be the most innovative company on Earth (not to mention worth more than 50 Billion) by many in the software
industry (and obviously stockholders as well).
A number of Google's competitors have several internal groups whose job
is to "incubate ideas" and foster innovation yet it seems that Google is the company
most associated with innovation in the online space.
For example, Yahoo! has Brickhouse and Yahoo!
Research while Microsoft has Microsoft
Research, Live Labs, Search
Labs, and Windows
Live Core among others.
Below are some of the ways technology companies can follow Google's example without having
to resort to some of their more eccentric practices like free
food prepared by gourmet chefs and on-site massages, dry cleaning and oil changes to
motivate your employees.
1. Everyone is Responsible for Innovation: There are several ways Google has created
a culture where every technical employee feels that innovation is expected of them.
First, there is the strong preference for people who have a track record of producing
original ideas such as Ph.D's [who
are required to produce original research which advances the state of the art as part
of their thesis] and founders of Open Source projects (e.g. Spencer
Kimball (GIMP), Aaron
Boodman (Greasemonkey), and Guido
Van Rossum (Python)). Secondly, employees are strongly encouraged but not required
to spend 20% of
their time on projects of their own design which are intended to benefit the company
and/or its customers. Not only does this give employees an outlet for their creativity
in a productive way, working on multiple projects at once gives developers a broader
world view which makes it less likely that they will develop tunnel vision with regards
to their primary project. Finally, Google has a single code base for all of their
projects and developers
are strongly encouraged to fix bugs or add features to any Google product they want even
if they are not on the product team. This attitude encourages the cross pollination
of ideas across the company and encourages members of the various product teams to
keep an open mind about ideas from outside their particular box.
2. Good Ideas Often Come from Outside your Box: A lot number of people in the
software industry often criticize Microsoft for it's practice of innovation through
acquisition and have compiled lists
of Microsoft's innovations that were actually acquisitions but the fact is that
the road to success lies in being able to spot good ideas whether they come from within
your company or without.
3. Force Competition to Face the Innovator's Dilemma: One reason that a number
of Google's products are considered innovative is that they challenge a number of
pre-existing notions about software in certain categories. For example, when Gmail [a
product of an engineer's 20% time spent on side projects] was first launched it was
a shock to see a free Web-based email service qive users 1 gigabyte of free storage.
A key reason that this was a shock was because most free Web-based email services
gave users less than a hundredth of that amount of storage. This was because the business
model for free email was primarily to give users a crappy user experience (2MB of
storage, obnoxious advertising, etc) and then charge them for upgrading to a decent
experience. Thus there was little incentive for the major players in the free email
business to give free users lots of storage or a rich online experience because isn't
how the business worked. Another example, that is likely to be a classic case study
of the innovator's dilemma in
the years to come is Google Docs & Spreadsheets vs. Microsoft
Office. From the Wikipedia article on disruptive
technology.
In low-end disruption, the disruptor is focused initially on serving
the least profitable customer, who is happy with a good enough product. This type
of customer is not willing to pay premium for enhancements in product functionality.
Once the disruptor has gained foot hold in this customer segment, it seeks to improve
its profit margin. To get higher profit margins, the disruptor needs to enter the
segment where the customer is willing to pay a little more for higher quality. To
ensure this quality in its product, the disruptor needs to innovate. The incumbent
will not do much to retain its share in a not so profitable segment, and will move
up-market and focus on its more attractive customers. After a number of such encounters,
the incumbent is squeezed into smaller markets than it was previously serving. And
then finally the disruptive technology meets the demands of the most profitable segment
and drives the established company out of the market.
As someone who now maintains several wedding lists in collaboration with his future
spouse I can say without a doubt that universal access to our files from any computer
without my fiancèe or I having to install or purchase any software is head and shoulders
beyond the solution provided by traditional desktop productivity suites. In addition,
it is quite clear that Google will move to address the gaps in time (see Google
Gears) so we are likely on the cusp of a multi-billion dollar software category
undergo upheaval in the next few years.
The main lesson here is Change the Game. Do not play by the rules that favor
your competitors.
Every successful company needs innovation -- tell your boss.
Facebook has made its first acquisition: Parakey, a startup founded by Blake Ross and Joe Hewitt, co-founders of Mozilla Firefox.
